ASX AND MEDIA RELEASE

Page 1 of 13

For Immediate Distribution

21 March 2012

DAVID JONES ANNOUNCES ITS FUTURE STRATEGIC DIRECTION
DAVID JONES HAS MANY EXISTING STRENGTHS: It has a distinctive positioning in the Australian market, a loyal customer base, a strong service ethic, a profitable and well positioned store portfolio, a strong Balance Sheet, robust cashflows and a high dividend payout ratio - all of which position the Company well to leverage the many opportunities that exist for future growth outlined below.

DESPITE ITS STRENGTHS THE COMPANY FACES CHALLENGES
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Structural Changes – the internet is globalising & changing retailing;
Macro Economic Headwinds –retail sales have been flat and rents, labour, utilities & financing costs are increasing; Challenging Australian Consumer Credit Markets - the Company’s card portfolio is exposed to prevailing weak discretionary retail spending. This could result in a halving of EBIT contribution from this business in FY14 when the alliance with American Express converts to a share of underlying profits.

DAVID JONES WILL ADDRESS THESE CHALLENGES & GROW VIA A “3 POINT STRATEGY”
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Transformation: The Company is in the process of transforming:
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into an Omni Channel Retailer (OCR) modelled on international department store best practice. The
Company is investing in technology and realigning its processes & structures. The Company will increase its online SKUs from 9,000 to 90,000 before Christmas 2012. Its OCR offering will integrate the shopping experience across sales channels (i.e. physical stores, web-store, mobile applications, contact centre, social commerce platforms) to enable customers to choose how and when they engage with David Jones, supported by integration and investment in its marketing channels (traditional and digital);
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its Customer Service & Engagement